Signs of recovery for cargo business as oil prices drop

GREEN SHOOTS:：Times are changing for CAL’s cargo business on the back of recent tech shipments, as a drop in global crude oil prices signals a brighter future

By Amy Su / Staff reporter

Sat, Oct 27, 2012 - Page 14

China Airlines Ltd (CAL, 中華航空) president Sun Hung-hsiang (孫洪祥) said yesterday he had seen signs of recovery in the company’s cargo business this quarter on the back of strong shipments of newly launched electronic products.

“The launch of new Windows 8 products and Apple Inc’s new smartphone and tablet devices has mildly boosted cargo traffic on CAL’s routes to the US and Europe,” Sun told reporters on the sidelines of the opening of the Taipei International Travel Fair.

Sun said the air cargo business would show a significant rebound in the second half of next year along with a gradual upturn in the global economy.

Prices of aviation fuel have recently dropped to US$124 per barrel, in line with the downward trend of global crude oil prices. However, Sun said prices were still higher than the “reasonable” levels of around NT$115 per barrel estimated by the company.

Sun said how global oil prices would move remained the greatest uncertainty for the sector’s potential profitability during the October-to-December period. Therefore, in spite of stable passenger-flight sales and recovering cargo demand, the firm remained cautiously optimistic about its business performance this quarter.

In the first half of the year, CAL posted a net loss of NT$1.04 billion (US$35.49 million), or a loss per share of NT$0.23, compared with a loss of NT$661.5 million, or NT$0.17 per share, a year earlier.

TransAsia Airways Corp (TNA, 復興航空) chairman Vincent Lin (林明昇) also expressed optimism about the company’s performance in the fourth quarter, expecting quarterly revenue to remain flat from the same period last year.

TNA — which focuses on regional routes — is likely to see full-year revenue grow 10 percent to 20 percent from last year, he said.

The company returned to the black in the first half of the year by posting a net profit of NT$45.54 million, or earnings per share of NT$0.08, statistics showed.

The four-day travel fair, which has more than 1,000 booths and 60 countries represented, is expected to attract more than 250,000 visitors and create NT$1.5 billion in revenue, according to the Taiwan Visitors Association.